Pakistan has introduced a more formal method for taxing income earned through social media, giving the Federal Board of Revenue (FBR) a way to estimate a creator’s income rather than relying only on the amount they report.
The new framework covers both resident and non-resident creators earning from interaction with users in Pakistan, although the rules differ between the two.
How FBR can now estimate creator income
For YouTube, FBR has fixed a revenue-per-thousand-views benchmark of Rs195.
In simple terms, FBR can take the relevant number of views, divide them by 1,000 and multiply the result by Rs195. It then compares this estimate with the creator’s actual earnings, including remuneration received in cash or kind. The higher amount becomes the starting point for calculating income.
For example, one million relevant YouTube views would produce estimated revenue of Rs195,000 under the benchmark. If the creator actually earned Rs300,000, the higher amount would be used. If reported earnings are below the benchmark, the creator can provide evidence supporting the lower amount.
This does not mean creators are being charged Rs195 in tax for every 1,000 views. Rs195 is an assumed revenue figure used to estimate earnings.
Creators can deduct actual expenses, but deductions are capped at 30% of total revenue. This is not an automatic 30% allowance. The expenses still need to be genuine and supportable.
Residents and non-residents are treated differently
For a Pakistan-resident creator, the special procedure applies where income is derived from interaction with users in Pakistan.
This is important because the rules are not simply written as a tax on every worldwide view received by a Pakistani creator. However, the rules do not clearly explain how creators should separate Pakistani audience activity from overseas activity when applying the view-based formula.
For non-resident creators, Pakistan-source social-media income linked to Pakistani users comes within the special regime only after the relevant user threshold is crossed: more than 50,000 users during a tax year or 12,250 during a quarter.
How this interacts with withholding tax
The new rules mainly determine how much social-media income should be recognised for income-tax purposes.
Creators covered by the procedure may also have to calculate advance income tax during the year and declare social-media income separately in their income-tax return.
Separately, payments received from social-media platforms can be subject to withholding tax. The withholding and the new income-calculation method should not be seen as two completely separate taxes. One collects tax when payment is received, while the new procedure helps determine the income that should be recognised for income-tax purposes.
The bigger issue is whether views are a good measure of income
The same number of views can generate very different revenue for different creators.
Earnings depend on where the audience is located, the type of content, advertiser demand, video length, monetisation rates and whether the views were monetised at all.
FBR partly addresses this by allowing creators to provide evidence where actual earnings are lower than the calculated benchmark. In practice, this makes platform statements, bank records, sponsorship agreements and expense records much more important.
The Rs195 benchmark is currently tied to YouTube. The rules cover social-media platforms more broadly, but do not currently set an equivalent per-view benchmark for platforms such as TikTok, Instagram or Facebook.
There may also be a separate provincial sales-tax-on-services obligation, depending on the type of service provided and the rules of the relevant provincial revenue authority.
Pakistan’s creator economy is therefore moving towards a more formal tax framework in which platform data, audience activity and documented expenses can directly affect the amount of income recognised for tax purposes. The main challenge will be applying that framework without assuming that every view has the same economic value.
